Robinhood Markets (NASDAQ:HOOD | HOOD Price Prediction) stock is up 6% in Friday morning trading, with shares climbing to $92 as of the latest data. That’s a meaningful intraday surge for a stock that’s been under pressure, sitting 18% below its year-opening price of $113.10. Today’s move is drawing serious attention from retail investors and traders alike.
The catalyst is hard to ignore. The SEC recently decided to scrap the pattern day trader equity rule, which previously restricted retail investors who made more than three day trades in a five-day period without maintaining a minimum account balance of $25,000. That’s a structural tailwind for Robinhood’s entire business model, and the market is pricing it in fast.
Retail sentiment is running hot. A post titled “Robinhood stock jumps as SEC scraps $25K pattern day trader rule” on WallStreetBets peaked at 543 upvotes and 84 comments by Thursday morning, confirming that everyday investors understand exactly what this rule change means for platforms like Robinhood.
SEC Rule Change Removes a Major Barrier to Active Trading
The removal of the pattern day trader rule dramatically lowers barriers to active trading for everyday investors, and Robinhood is the clearest beneficiary. Its entire brand is built around democratizing finance, and a rule that locked out anyone without $25,000 in their account was a direct obstacle to that mission.
The numbers backing Robinhood’s business are already strong heading into this regulatory shift. Full-year 2025 revenue hit a record $4.47 billion, and Gold subscribers grew 58% year over year to 4.2 million. The prediction markets currently assign a 99% probability that Gold subscribers will exceed 4.2 million in Q1, with a 76% probability of surpassing 4.4 million.
Robinhood’s options segment is particularly relevant here. Options revenue reached $314 million in Q4 2025, up 41% year over year. More active retail traders, no longer gated by a $25,000 minimum, means more options volume flowing through Robinhood’s platform.
Schwab’s Crypto Launch Adds Competitive Pressure
Charles Schwab (NYSE:SCHW) is entering the crypto trading arena, and that’s a development Robinhood investors shouldn’t dismiss. Schwab’s platform will charge 1% per transaction, which is still more competitive than standard Coinbase (NASDAQ:COIN) fees, making it a credible alternative for mainstream investors looking to trade digital assets.
Schwab brings scale that’s difficult to underestimate. Total client assets stand at $11.77 trillion, and Q1 revenue came in at $6.48 billion. Funneling even a fraction of that client base into crypto trading would represent meaningful competition for Robinhood’s crypto revenue, which already showed volatility, declining 38% year over year to $221 million in Q4 2025.
That said, Robinhood isn’t standing still. It owns Bitstamp for institutional crypto and is building what it calls a “Financial SuperApp,” with prediction markets now generating $147 million as a new revenue line. Schwab’s entry intensifies competition, but Robinhood’s head start in retail crypto and its brand loyalty among younger investors remain real advantages.
Valuation Context and What the Bulls Are Watching
Robinhood stock’s fair value is estimated at $194.61, implying 55% upside from current levels, contingent on continued crypto activity and a favorable regulatory environment. The SEC rule change checks the regulatory box in a meaningful way. The analyst consensus target sits at $101.40, with 20 analysts rating the stock Buy or Strong Buy against just 3 Sell or Strong Sell ratings.
The bears have legitimate concerns, though. Robinhood’s expenses increased 38%, and a recent earnings miss raised questions about the profitability trajectory. The trailing P/E ratio stands at 42x, which leaves limited margin for error if growth disappoints. For context on how far both Robinhood and Coinbase have traveled since going public, this 247 Wall St. deep dive on IPO returns is worth a read.
Peers Also Moving Higher
Coinbase stock is also surging on the day, rising 6% to $211 as the broader crypto and fintech space benefits from the same regulatory optimism. The prediction markets assign a 96% probability that COIN closes up on April 17, mirroring the bullish setup in HOOD. Meanwhile, Schwab shares are down slightly, off less than 1% on the day, suggesting the market views the crypto launch as a cost rather than an immediate catalyst for Schwab itself.
Certainly, it’s likely that COIN and HOOD stocks will close higher today. Watch for whether today’s gains hold into the close, particularly as traders weigh the SEC tailwind against Schwab’s competitive move into crypto.
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